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Five things to know about the IRS's changes to next year's taxes

The IRS announced on Tuesday inflation adjustments for more than 60 tax provisions for tax year 2023, including the standard tax deduction and the designation of tax brackets, both of which affect the vast majority of taxpayers. 

These tax adjustments happen every year, but since inflation is at a nearly 40-year high of 8.2 percent, next year’s adjustments will be particularly noticeable. 

The standard deduction for single taxpayers will rise 6.94 percent for 2023 to $13,850. That’s an extra $900 in tax-free income, more than double the adjustment for 2022, which was a 3.19-percent increase for a total of $400. 

Tax brackets will also shift upward. The 12-percent tax bracket for 2023, which is the most common and accounted for more than a third of all tax returns in 2019 at 53 million total filings,  now applies to incomes between $11,000 and $44,725. That’s an upward shift of just over 7 percent, compared to an upward shift of about 3.2 percent the year prior. 

The adjustments follow last week’s announcement of an 8.7-percent increase in Social Security payments – the biggest shift in decades set to take effect next year. 

Here are five things to know about the inflation adjustments for 2023 taxes. 

The changes allow taxpayers to break even 

Just like the Social Security Cost of Living Adjustment (COLA), which will provide an extra $140 a month to recipients on average, the extra money resulting from the tax code adjustments really isn’t extra money. It just allows taxpayers to break even, remaining where they were the year prior for the purposes of classification by the IRS. 

That’s due to inflation, which makes everything more expensive, including wages paid to workers. Average hourly wages are up 5 percent since last year to $32.46 an hour from $30.92, though they’ve been rising less quickly than prices in general for a net devaluation of 3 percent. 

Inflation is showing little sign of slowing down as it’s now been above 8 percent for seven months in a row. Core inflation, which is prices minus the volatile categories of energy and food, rose 6.6 percent in September on an annual basis. That number was the same in August.  

“Ideally inflation is very low and the adjustments are low,” Robert McClelland, a former employee of the Bureau of Labor Statistics, said in an interview with The Hill. “But these adjustments make sure that people can break even.” 

“People are trying to say that these things are moving up a lot so you’ll keep more of your own money, but in real terms, you’re just breaking even,” he said. 

Adjustments prevent “bracket creep” 

If marginal tax rates were left alone each year, experts say that inflation, which the Federal Reserve tries to keep around 2 percent in normal conditions, would cause people’s taxes to increase unfairly in what the Beltway set terms “bracket creep.” 

That’s because the U.S. has a progressive income tax, which ranges from 12 percent on the low end of the spectrum to 35 percent on the high end. With inflation shrinking the value of the dollar within the domestic economy, incomes would naturally slide into a higher tax bracket and receive a higher tax rate even though personal income hasn’t actually increased. 

An example provided by the Tax Foundation, a Washington think tank, illustrates this point: 

“Imagine Beth has an annual income of $50,000 in 2000 and that her income grows to $75,000 by 2020. One might point out that Beth’s salary grew by 50 percent in nominal terms. However, the cumulative rate of inflation between 2000 and 2020 was about 50 percent. That means Beth’s higher 2020 salary actually buys her the same amount of goods and services in today’s economy. In other words, her purchasing power has stayed the same.” 

Yanking up tax brackets every year prevents both the “inherent unfairness of paying a higher rate when you’re actually just breaking even and the government essentially raising taxes without explicitly saying that’s what they’re doing,” Robert McClelland said. 

Wages in the U.S. aren’t adjusted to keep up with inflation 

Though tax brackets and some deductions are indexed to inflation, wages in the U.S. are not, meaning that employers in the U.S. are not required to offer a cost-of-living adjustment commensurate with the rising price of goods and services, though some labor unions may stipulate this in contracts with managers, experts say. 

That means that wages and salaries do not increase at the same rate that inflation does. In fact, inflation has actually outpaced wage growth over the last year, leading to a decline of 3 percent in real wages, and perhaps taking some of the momentum out of bracket creep. 

However, this lag doesn’t matter for tax adjustments, which are changed to a particular calculation of the consumer price index (CPI) known as the chained CPI. Chained CPI differs from other versions by taking into account the extent to which consumers switch between comparable goods to avoid rising prices. 

Experts say that offering automatic wage adjustments for inflation would have a hard time becoming a law in the current political environment. 

“To mandate that across industries and businesses, I imagine that’s something that would be pretty difficult to get Congress on board with,” Alex Durante of the Tax Foundation said in an interview. “Even indexing minimum wages to inflation, there seems to be disagreement among policymakers.” 

Tax credits for the rich are adjusted upwards 

Tax credits affecting wealthy people are also receiving upward adjustments.  

The foreign earned income exclusion is increasing to $120,000, up from $112,000 for tax year 2022. Median U.S. income is about $30,000. 

For people who can afford to spend thousands of dollars a year on gifts, the gift tax exclusion will go up 6.25 percent to $17,000 for 2023, up from $16,000 in 2021. 

And for the super wealthy, the estate tax for people who die in 2023 will have a basic exclusion amount of $12,920,000, up from a total of $12,060,000 for estates of people who died in 2022. That means almost $13 million of intergenerational wealth will go untaxed by the government. 

Only 20,876 people filed tax returns in 2019 worth more than $10 million, according to Treasury figures. That’s 0.0063 percent of the population. 

The Earned Income Tax Credit, which helps lower-income Americans, is rising to $7,430 from $6,935.  

Not every tax credit will be revised upward 

While the refundable portion of the Child Tax Credit, which has been hailed as one of the most significant poverty reducers in U.S. tax policy, is being adjusted upward for inflation by 6.67 percent, the maximum credit of $2000 will stay the same. 

Thresholds for the net investment income tax originally passed as part of the Affordable Care Act included will stay the same, as they have since 2010. 

The personal exemption for tax year 2023 remains at 0, the same as 2022.  

The IRS still has to release some adjustments for next year, including how much money is allowed to go into pretax contributions to 401(k) plans. 

Source: TEST FEED1

These third-party candidates could have a big impact on the midterms

With less than three weeks to go until the midterm elections, observers are waiting to see which party can claim to have the better night: Republicans or Democrats.

But while most of the attention is understandably focused on the two major parties, a handful of third-party candidates are poised to have an outsized impact on Election Night as well.

Most of these candidates have no chance of winning outright, but they could tilt the scales just enough to shape the outcome of their respective races.

Here are five third-party candidates to watch as the midterms approach.

Evan McMullin — Independent Utah Senate candidate

Utah is the only state with no Democratic candidate running for Senate.

Instead, incumbent Sen. Mike Lee (R) will face Evan McMullin, a former presidential candidate running as an Independent. The Utah Democratic Party endorsed McMullin in his challenge.

Utah is a reliably red state, having elected Republicans to both of the state’s Senate seats for more than 40 years.

But recent polls show a potentially close race, with Lee only leading McMullin by only a few points in some surveys, far less than Lee’s more than 40-point victory in 2016.

The latest Deseret-Hinckley poll shows Lee leading McMullin 41 percent to 37 percent, with 12 percent of Utah voters undecided.  

If he pulls off an upset, McMullin would join two other Independents in the upper chamber: Sens. Bernie Sanders (Vt.) and Angus King (Maine).

But both Sanders and King caucus with Democrats, and McMullin has pledged to not caucus with either party.

That means a McMullin victory could cause a potential shake-up for Republicans, who are counting on a few battleground races to flip Democrats’ razor-thin majority.

Pundits aren’t so sure of McMullin’s chances, however. The Cook Political Report rates the race as likely Republican, and FiveThirtyEight’s model suggests Lee retains a 94 percent chance of victory.

Shane Hazel — Libertarian Georgia gubernatorial candidate

Shane Hazel has virtually no chance of winning the Georgia governor’s mansion, but his candidacy could still impact who becomes the victor.

Georgia is one of two states to implement runoff elections, meaning that if no candidate receives more than 50 percent of the votes, the top two candidates face voters again in a runoff on Dec. 6.

Incumbent Georgia Gov. Brian Kemp (R) has the slight edge, but with the state’s gubernatorial contest coming down to the wire, it is plausible Hazel will get enough votes to prevent him or Democratic nominee Stacey Abrams from achieving an outright majority.

Bolstering that possibility is the fact that Hazel garnered fresh attention this week when he shared a debate stage with Abrams and Kemp, giving him a major platform to make his case to Georgia voters.

Granted, most surveys show Kemp with a majority — though just barely.

An Emerson College-The Hill survey taken earlier this month found Kemp leading Abrams 51 percent to 46 percent.

Kemp and Abrams are facing Georgians in a rematch of their 2018 race, when Kemp beat Abrams by avoiding a runoff by just 0.2 percentage points.

Chase Oliver — Libertarian Georgia Senate candidate

Like the state’s gubernatorial race, Oliver could cause trouble for Sen. Raphael Warnock (D) and his GOP opponent, former NFL star Herschel Walker (R), by forcing their race into a December runoff.

That could also throw the fate of the Senate into limbo for another month if control of the Senate comes down to the Peach State — as it did in 2020.

Only a few polls show one of the nominees reaching a majority, with most showing both Warnock and Walker’s support clocking in within the high 40s.

A recent Emerson College-The Hill survey found Warnock leading with 48 percent support to Walker’s 46 percent. 

About 1.3 percent said they would vote for Oliver, while other polls that included the Libertarian as an option show him with as much as 4 percent support.

The Emerson College-The Hill survey and most others enable respondents to indicate if they are undecided. Four percent of voters in the poll said they were undecided, with many likely to make a determination prior to showing up on Election Day and pushing one of the nominees over the majority threshold.

Betsy Johnson — Independent Oregon gubernatorial candidate

Oregon has elected Democratic governors consistently since 1986, but the introduction of Johnson as an Independent candidate has increased Democrats’ worries of holding the seat.

Johnson, a former Democratic state lawmaker who resigned from the state Senate last year upon announcing her campaign, is trailing behind Democrat Tina Kotek and Republican Christine Drazan in the polls.

But those surveys also show Johnson garnering double-digit support in the state, fueling concerns that her appeal will siphon off votes from Kotek and enable a Republican to become the state’s first governor in more than 30 years.

An Emerson College poll released earlier this month found Drazan with just a 2-point lead over Kotek, 36 percent to 34 percent. 

Johnson, meanwhile, received 19 percent support, while 9 percent of voters were undecided.

President Biden visited the state over the weekend in the latest sign the Democratic hold on the Oregon’s governor mansion may be at risk.

The party is also facing a number of competitive House races in the state.

Erik Gerhardt — Libertarian Pennsylvania Senate candidate

Pennsylvania’s Senate contest is one of a handful that could determine control of the upper chamber for the next two years.

Polls have shown Republican Mehmet Oz catching up to Democrat John Fetterman as Republicans pummel Fetterman over crime and his health.

A poll from the conservative Trafalgar Group found Fetterman leading Oz by about 2 percentage points.

But Gerhardt, the Libertarian nominee, garnered 3.4 percent, an amount larger than the gap between the two major nominees.

With the contest turning into more of a nail-biter by the week, a small number of voters who opt to cast their ballot for Gerhardt over another nominee could shift the race’s outcome.

Polling shows Gerhardt as the most prominent third-party candidate, but voters will also see Green Party nominee Richard Weiss and Keystone Party nominee Daniel Wassmer on their ballots.

A Suffolk University-USA Today poll late last month found Weiss and Wassmer picking up a small number of votes in their sample, less than 1 percent each.

Source: TEST FEED1

Israel holds fire amid mounting pressure from Ukraine

Israel is rejecting desperate calls from Ukraine to supply advanced air defense systems to counter Russia’s use of Iranian kamikaze drones, intent on maintaining strategic ties between Jerusalem and Moscow.

Israeli Defense Minister Benny Gantz on Wednesday said that Israel “will not provide weapon systems,” but said that Jerusalem will continue to side with Western support for Kyiv. 

“We have asked the Ukrainians to share information regarding their needs and offered to assist in developing a life-saving early-warning system,” he reportedly said in remarks to ambassadors from the European Union. 

Israel has sent humanitarian assistance to Ukraine, publicly condemned Russia’s invasion and is reportedly sharing intelligence with Kyiv. 

But it has held back on strategic military aid, hoping to preserve its Moscow ties. 

Those ties include Israeli communication with Russia in Syria to target Iranian weapons transfers through the country, and Israeli concerns for the Jewish diaspora in Russia. 

Gantz’s rejection of military assistance came after the Ukrainian Embassy in Israel officially appealed for air defense systems following two weeks of devastating attacks by Russia using the Iranian drones. 

The Shahed-136, nicknamed the kamikaze drones, have killed civilians in their homes and on the street, and destroyed critical infrastructure that threatens the country’s electricity and water supplies as winter temperatures begin to take hold. 

The Ukrainian Embassy in Israel, in a letter sent Tuesday, asked the Israeli government to enter into “mutual cooperation in the field of air/missile defense,” warning that Iran’s battlefield experience for its weapons systems is a direct threat to the Middle East. 

“The request of the Ukrainian side to the Israeli side to support above mentioned proposals is based on the consideration that positive experience gained by Iran of using the above-mentioned weapons in Ukraine will lead to further improvement of Iranian systems,” the letter read, and reported by Axios. 

The letter asks for Israel’s Iron Dome system, which last had a 97 percent success rate at intercepting nearly 600 missiles shot from the Gaza Strip over the course of a few days in August. 

“We are a country at war ourselves, I don’t think we can afford emptying our warehouses,” said Uzi Rubin, founder and first director of the Israel Missile Defense Organization in the Israel Ministry of Defense and a fellow with the Jerusalem Institute for Strategy and Security. 

“We export weapons. We are one of the 10 largest exporters. But that means if you want an Israeli system, you have to contract for it and wait for it to be manufactured.”

Other air defense systems Ukraine requested in its letter are the Barak-8, David’s Sling and Arrow Interceptor — advanced and layered air defenses that can intercept medium- to long-range rockets and missiles, and are increasingly used to intercept drones. 

Other requests, like the Iron Beam — a high energy laser weapon system developed by Israeli weapons manufacturer Rafael — are not operational. And while the Ukrainians appeared to request a Patriot Missile Defense System from the Israelis, that system is made by the U.S. and is deployed in Saudi Arabia for missile and drone defense. 

While the U.S. Army has possession of two Iron Dome batteries, the administration has not sent any signals it’s looking to send those to Ukraine. 

Becca Wasser, senior fellow for the defense program at the Center for New American Security, said one reason the U.S. may not send its own Iron Dome is that it only has two, and only one is operational in Guam.

“A few years ago the [House Armed Services Committee] was talking about the U.S. sending one of its Iron Dome batteries to Ukraine, long before the recent events took place with Russia’s invasion,” she said. 

“But at the end of the day … the United States does not have that many Iron Dome systems.”

But she added there has been a recent U.S. push “to have other allies and partners step up in providing air defenses to Ukraine.”

Seth Frantzman, author of “Drone Wars: Pioneers, Killing Machines, Artificial Intelligence, and the Battle for the Future,” said that early detection is more critical than expensive air defense systems, adding the Iranian-made kamikaze drone is slow-moving and “sounds like a kind of flying lawn mower.”

“Ukraine needs the right kind of radars to detect the drones,” he said, giving them time to decide how to shoot them down with war planes, shoulder-launch rockets or small arm fire.

Germany, Spain, NATO and the U.S. have sent, and are sending, more air defense systems to Ukraine, but Kyiv is pleading for more. 

“Iranian drones that attack Ukraine were probably produced to attack Israel,” tweeted Anton Gerashchenko, adviser to the Minister of Internal Affairs of Ukraine. “Israel knows better than anyone what it’s like to fight terrorists. We ask Israel to give us air defense systems and defensive weapons – they are critically important when dealing with terrorists.”

Frantzman said Israel is familiar with the ways Russia appears to be using Iranian drones.

“It’s actually being used by the Russians just to bludgeon and murder the civilian population and terrorize people. Israel has faced similar types of indiscriminate rocket fire and now a bit of drone fire, that’s why it built systems like Iron Dome,” he said. “So from Israel’s perspective, it’s like Israel’s already seen this.” 

While the Biden administration has quietly pushed for Jerusalem to more firmly stand up for Ukraine against Russia’s aggression, it has held back from public calls that Israel provide critical military defense to Kyiv.

“We’ve said that we’ve been — pleased is maybe the wrong word — but we’ve been fine with Israel’s complicated relationship [with Russia],” U.S. Ambassador to Israel Tom Nides said in an interview with The Hill in September. 

“It’s a little complicated for Israel obviously, but we push them every day,” he added. 

A few isolated voices in Israel have said Iran’s drone sales and expected missile sales to Russia are reason enough to justify military deliveries. 

“This morning it was reported that Iran is transferring ballistic missiles to Russia. There is no longer any doubt where Israel should stand in this bloody conflict,” Israel’s Minister for Diaspora Affairs Nachman Shai tweeted on Sunday. “The time has come for Ukraine to receive military aid as well, just as the USA and NATO countries provide.” 

Rubin said for Israel, Russia’s use of Iranian drones could present an intelligence-gathering opportunity for future conflicts with Tehran. 

“Of course [the Iranians] learn more — the conflict in Ukraine is a very high-intensity conflict, they learn from that. But at same time we also learn from how they’re being combatted, we see what’s happening and we learn from that too.”

And Russia has issued stark warnings of severing relations with Israel if Jerusalem shifts its position. 

“It seems Israel will supply weapons to the Kyiv regime. A very reckless move. It will destroy all diplomatic relations between our countries,” Dmitry Medvedev, deputy chairman of the Security Council of Russia and a key Putin ally, wrote on Telegram. 

Rubin said that Medvedev’s threats resonated in Israel. 

“Israel declared neutrality because we have relations with Russia. It’s something I don’t think we can easily give up,” he said.

Israel is set to go to elections in November, and there’s little public pressure for the government to more robustly support Ukraine. Polling data from March found that only 22 percent of Israelis supported sending military assistance to Ukraine, and that voters are largely focused on the rising cost of living. 

“I, as an Israeli would like to keep our channels to Russia open, but I am a citizen, just a taxpayer and a voter, I’m not making the decisions,” Rubin said. 

Source: TEST FEED1

Judge orders more Eastman emails released, citing fraud pushed by Trump

A California-based federal judge ordered a legal adviser to President Trump to turn over records tied to Jan. 6 to the House committee investigating the attack, finding the communications were not protected since they likely were exchanged in furtherance of a crime.

Included in the emails is evidence that Trump pushed ahead in court with voter fraud claims he knew were inaccurate — details certain to be of interest to the House select committee.

Judge David Carter ordered John Eastman, who crafted two memos for the Trump campaign detailing methods to resist certifying President Biden’s victory, to turn over some 33 documents to the House panel.

That includes eight documents the judge said related to crimes of obstructing an official proceeding and conspiracy to defraud the United States.

Carter previously found in March that it was more likely than not that Trump committed crimes as part of his plot to stay in power.

Wednesday’s ruling notes an email among Trump’s lawyers specifically related to conspiracy to defraud.

One email from Eastman notes Trump was told that a suit filed in state court in Georgia claiming that unregistered voters and dead people voted in the election may not have accurate numbers – relaying that concern before the campaign escalated the matter to a federal court.

One email from Eastman notes Trump was told that a December suit filed in Georgia claiming that unregistered voters and dead people voted in the election there may not have accurate numbers – relaying that concern before the campaign escalated the matter to a federal court.

“Although the President signed a verification for [the state court filing] back on Dec. 1, he has since been made aware that some of the allegations (and evidence proffered by the experts) has been inaccurate. For him to sign a new verification with that knowledge (and incorporation by reference) would not be accurate,” Eastman said.

“President Trump and his attorneys ultimately filed the complaint with the same inaccurate numbers without rectifying, clarifying, or otherwise changing them,” Carter wrote. “President Trump, moreover, signed a verification swearing under oath that the incorporated, inaccurate numbers ‘are true and correct’ or ‘believed to be true and correct to the best of his knowledge and belief.’”

“The emails show that President Trump knew that the specific numbers of voter fraud were wrong but continued to tout those numbers, both in court and to the public. The Court finds that these emails are sufficiently related to and in furtherance of a conspiracy to defraud the United States.”

The ruling likewise notes that four emails from Eastman and other attorneys “suggest that — irrespective of the merits — the primary goal of filing is to delay or otherwise disrupt the January 6 vote.”

One such email claimed that having litigation before the Supreme Court could aid the campaign’s efforts in Georgia.

“This email, read in context with other documents in this review, make clear that President Trump filed certain lawsuits not to obtain legal relief, but to disrupt or delay the January 6 congressional proceedings through the courts,” Carter wrote.

The ruling from the court – and the emails about Trump’s knowledge ahead of court activity – comes shortly after the House committee held its likely final hearing, dedicating much of its time to share new evidence that Trump knew he lost the 2020 election. 

The presentation included new testimony from former aides to Trump, including Alyssa Farah Griffin, the former White House director of strategic communications, who said she entered the Oval Office after the election to hear Trump say, “Can you believe I lost to this effing guy?”  

The committee also offered new details about the extent Trump planned to claim he had won the 2020 contest on election night regardless of the results, including testimony from former campaign manager Brad Parscale that he planned to do so as far back as July.

This story was updated at 4:06 p.m.

Source: TEST FEED1

What Putin’s martial law order means for the Russia-Ukraine war

Russian President Vladimir Putin announced the latest escalation of his war in Ukraine on Wednesday, declaring martial law in occupied areas of Ukraine and wartime measures throughout much of Russia. 

Ukrainian officials said the order would not deter their efforts to retake occupied territory, but warned it could mean mass deportations of Ukrainians out of the occupied regions, and harsher treatment for those that remain. 

Experts said the order could also be a “back door” to pull more of Russian society into the war effort, strengthening Putin’s footing for future offensives but weakening his claim that the “special military operation” in Ukraine is not a full-fledged war. 

“This is a big deal because in effect what Putin is doing is actually bringing all the Russian Federation into some level of martial law,” said Mark Galeotti, an honorary professor at the University College London’s School of Slavonic & East European Studies.

“In terms of sort of shifting to a sort of model of national mobilization of every aspect of politics, society and economics, you know, this is definitely a move that up to now Putin has been trying to avoid.”

While the martial law order mainly applies to the four occupied regions of Ukraine — Donetsk, Luhansk, Zaporizhia and Kherson  — it also announced the “economic mobilization” of eight Russian regions on Ukraine’s border, including occupied Crimea.  

And the final section says “other measures may be applied in the Russian Federation during the period of martial law.” 

What it means for Ukraine

Ukrainian President Zolodymyr Zelensky’s office was quick to minimize the significance of Putin’s order. 

“‘Martial law’ implementation on the occupied territories by [Russia] should be considered only as a pseudo-legalization of looting of Ukrainians’ property by another ‘regrouping,’” Mykhailo Podolyak, a Zelensky advisor, wrote on Twitter. 

“This does not change anything for Ukraine: we continue the liberation and de-occupation of our territories.”

However, local Ukrainian officials warned that it could begin an even darker chapter in territories that Moscow illegally annexed earlier this month. 

“A new manifestation of genocide in the occupied territories,” Melitopol Mayor Ivan Fedorov wrote on Telegram. “The Ruscists are preparing the forcible deportation of an entire city. So far, it is between voluntary and forcible, supposedly aimed to protect people from hostilities.”

Oleksiy Danilov, secretary of Ukraine’s National Security and Defense Council, wrote that “Putin’s martial law in the annexed regions of [Ukraine] is preparation for the mass deportation of the Ukrainian population to depressed areas of [Russia] in order to change the ethnic composition of the occupied territory.”

Eugene Finkel, an associate professor at Johns Hopkins School of Advanced International Studies, who was born in Ukraine, said he didn’t expect the order would significantly change the situation on the ground. 

“I don’t think that having a martial law in place was the only thing that prevented Russians from carrying out those things, it certainly will give them some veneer of domestic legitimacy — obviously zero external legitimacy,” he said. 

Russia has already been accused of overseeing filtration camps in occupied areas, in which thousands of Ukrainians are sent to Russia, while its troops have reportedly committed an array of war crimes, from rape to torture, and mass executions. 

In announcing the new order on Wednesday, Putin told Russia’s Security Council that officials in the annexed regions should enact measures necessary to ensure the safety of the people, protect critical infrastructure, maintain public order and “increase the manufacturing of products necessary for the special military operation.”

He also noted that Ukraine had already declared its own martial law in the occupied regions following Russia’s invasion, and he said extraordinary measures were necessary to counter Ukrainian aggression.

“The neo-Nazis are using plainly terrorist methods, plotting sabotage at critical infrastructure, attempting to murder members of local authorities,” he said, referring to Ukraine’s government, per the Kremlin. 

What it means for Russia 

Putin’s order is his latest move to signal action in Ukraine as Russia’s military has faced a string of embarrassing losses in the northeast, and may soon lose its hold on Kherson in the south. 

His mobilization drive in recent weeks has stirred up significant domestic discontent, as war hawks have spoken out against the failures of Putin’s generals and urged for more aggressive action to regain momentum. 

While his martial law declaration was focused largely on Ukraine and border regions in Russia, Finkel said the final provision allowing for “other measures” could be a “backdoor to introduce martial law in other parts of Russia without actually calling it martial law.”

“And also a signal to the population that they’re doing something and something’s happening, because everybody knows that the war isn’t going as they planned,” he added. 

Galeotti said this could have broad implications for Russian society, allowing officials to control industrial activity to help the war, further control the media, or crush labor actions that conflict with wartime priorities. 

“I think in terms of what this shows is a growing awareness that Russia is in this probably for the long haul,” he said. 

Putin conveyed a similar message during his meeting the Security Council on Wednesday, in which he also ordered the creation of a special coordinating council to carry out the measures. 

“We are working on solving very complex, large-scale tasks to ensure a reliable future for Russia, the future of our people,” he said.

Source: TEST FEED1

Supreme Court urged to halt Biden's student loan forgiveness plan

A group of Wisconsin taxpayers on Wednesday asked the Supreme Court to block the Biden administration’s student loan forgiveness program while an appeal plays out in a lower court.

The emergency request, filed to Justice Amy Coney Barrett, who handles emergency matters arising from Wisconsin, comes shortly after the administration began accepting applications for the program.

The challengers, the Brown County Taxpayers Association, urged the court to rule that the president’s nationwide debt cancellation plan illegally encroaches on Congress’ exclusive spending power. 

“The assault on our separation of powers — and upon the principle that the spending power is vested solely in Congress — is extraordinary, and perhaps unprecedented,” they wrote in court papers. “We are witnessing a gargantuan increase in the national debt accomplished by a complete disregard for limitations on the constitutional spending authority.”

President Biden announced in August that his administration planned to forgive $10,000 in student loan debt for those making under $125,000 annually and $20,000 for recipients of Pell grants, which assists students from lower-income families. 

Updated 2:14 p.m.

Source: TEST FEED1

Special master asks Trump team for 'the beef' behind privilege claims

The special master appointed to review the documents former President Trump stored at his Florida home expressed hesitation during a Tuesday conference that they should be shielded from Justice Department investigators.

Judge Raymond Dearie asked attorneys for Trump to offer up more details about why an initial batch of documents already set aside by the Justice Department would be subject to privilege.

​​“It’s a little perplexing as I go through the log,” Dearie said. “What’s the expression — ‘Where’s the beef?’ I need some beef.”

The batch of documents in question includes a log where recommendations on pardons were among the materials Trump had in his home, a detail known only after a court filing was accidentally briefly unsealed before being removed from the public docket.

The conference comes as attorneys on behalf of Trump as well as the Justice Department are reviewing 11,000 unclassified records stored at Mar-a-Lago totaling ​​21,792 pages — much lower than the 200,000 initial estimate by the company hired to scan them.

Dearie also questioned why Trump’s team had claimed one of the documents was his personal property but also protected by executive privilege — one dealing with presidential records.

“Unless I’m wrong, and I’ve been wrong before, there’s certainly an incongruity there,” Dearie said.

Tuesday’s conference was an early sign of the work ahead as the parties pour over the thousands of pages of documents.

Dearie was appointed as special master as part of a ruling from Florida District Judge Aileen Cannon.

The 11th Circuit Court of Appeals has since reversed one aspect of her ruling, siphoning off classified records from the special master review. 

The broader case challenging the appointment of a special master is still being litigated by the appeals court. 

Source: TEST FEED1

US saw record drop in home sales in September: Redfin

Home sales declined the most on record in September as mortgage rates surged and pushed prospective buyers out of the once-hot housing market, according to a new report.

A report from the real estate company Redfin shows the number of homes sold fell by 25 percent and new listings dropped by 22 percent last month, marking the biggest declines on record in both categories — excluding numbers at the onset of the coronavirus pandemic in April and May 2020.

“The U.S. housing market is at another standstill, but the driving forces are completely different from those that triggered the standstill at the start of the pandemic,” Redfin economics research lead Chen Zhao said in a statement.

“This time, demand is slumping due to surging mortgage rates, but prices are being propped up by inflation and a drop in the number of people putting their homes up for sale,” Zhao added. “Many Americans are staying put because they already relocated and scored a rock-bottom mortgage rate during the pandemic, so they have little incentive to move today.”

Although prices have declined recently, sky-high mortgage rates have pushed monthly payments up by more than 50 percent year over year, according to the report.

The median home price in the U.S. rose by 8 percent year over year in September to $403,797. 

Meanwhile, more than 60,000 purchase agreements were canceled last month, which equals 17 percent of homes that went under contract.

Still, Zhao expects market conditions to worsen before getting better, while the Federal Reserve fights rising inflation.

“With inflation still rampant, the Federal Reserve will likely continue hiking interest rates,” Zhao said. “That means we may not see high mortgage rates—the primary killer of housing demand—decline until early to mid-2023.”

Mortgage rates have more than doubled since last year, reaching a 20-year high last week, according to data released Wednesday by the Mortgage Bankers Association.

The 30-year fixed rate climbed to 6.94 percent in the second week of October, up from 6.81 percent a week earlier. 

Source: TEST FEED1

The Hill's Morning Report — Twenty days to woo, agitate, frighten voters to cast ballots

In election years, candidates can inspire voters to cast ballots. They can anger the electorate to vote for political change. And they can stoke fear that such change dooms what voters hold most dear.

With 20 days until Election Day, this is the scary season. Ominous warnings, exaggerated portents and oversimplified promises are emanating from leaders in both parties this week — all geared to grab public attention and drive voters to participate, the earlier the better.

Democrats, increasingly nervous that Republicans are poised to gain control of the House next year and perhaps the Senate, have turned in part to U.S. bipartisan support for Ukraine to suggest that Republican dominance in Washington would undermine the global order and play into the hands of Russian President Vladimir Putin.

House Minority Leader Kevin McCarthy (R-Calif.) has signaled that additional U.S. Ukraine assistance will get pushback from his caucus, especially if Republicans are in charge. He hopes to be the Speaker leading them. “I think people are going to be sitting in a recession and they’re not going to write a blank check to Ukraine,” he told Punchbowl News in an interview “They just won’t do it.”

The Washington Post: McCarthy: GOP-led House likely to oppose more aid to Ukraine.

“I’m absolutely not supporting any further funding for Ukraine,” Rep. Greg Steube (R-Fla.), a member of the House Foreign Affairs Committee, told The Daily Beast last month. His reasoning: U.S. economic priorities. “At a time when inflation is skyrocketing and Americans are struggling to afford basic goods, we must put the needs of our country first,” he added.

Rep. Tom Malinowski (NJ), a member of the same committee who is also one of the most vulnerable Democrats, said he feared additional Ukraine aid is at risk if conservatives gain control of the House. “It’s certain that the next Congress is going to have more members of the Tucker Carlson/Donald Trump wing of the Republican Party… and I fear they will seize any opportunity they can find to at least chip away at our support for Ukraine,” he said in September.

Flashback: In May, 57 House Republicans and 11 GOP senators voted against a $40 billion supplemental aid package for Ukraine. Such opposition will rise (The Hill).

Senate Intelligence Committee Chairman Mark Warner (D-Va.) on Tuesday echoed those concerns, noting that support for Ukraine brought Democrats and Republicans together in the Senate.

“It is bipartisan to date, close to 90 senators. Overwhelmingly bipartisan,” Warner told Bloomberg Radio’s “Balance of Power.”

“I do fear that there is this Trump-led, America-alone contingent that could have greatly increased power in the House, and a Republican House next year could undermine that support,” he added. 

“That would be bad for Ukrainians. That would be bad for our unity with NATO. That would be bad for the world stage because if Putin sees that isolationist approach, he will push that advantage,” Warner said.

President Biden, eager to motivate voters based on anxieties about a conservative majority on the Supreme Court and far-right control of some state legislatures, on Tuesday pledged to codify Roe v. Wade in federal law by next year — if Democrats control Congress (The Hill). It was a midterm mix of bluster and bait.

At the same time, Speaker Nancy Pelosi (D-Calif.), during a Tuesday interview with NBC’s Andrea Mitchell, said Democrats need more seats in the Senate to enshrine abortion rights into law, which is why, she said, they didn’t push for it this year in the current 50-50 Senate. 

“You think we would have gotten 60 [votes to break a Senate filibuster] — 10 Republican votes? Do you think we would have gotten 10 Republican votes? Oh, come on,” the Speaker said on MSNBC. She also noted that the Supreme Court’s June decision shifted the midterm messaging for Democratic candidates and that because her party was prepared to make its case, the issue of state abortion restrictions has complicated the political terrain for some GOP challengers. 

Not to be outdone when it comes to wooing voters with future policy promises while also playing to their fears, more than 30 House Republicans on Tuesday unveiled a bill that would cut federal funds that support any “sexually-oriented program, event or literature for children under the age of 10” (The Hill). The bill says some school districts “encourage discussions” about transgenderism with kindergarteners.

The Washington Post: Gender identity lessons, banned in some schools, are rising in others.

Related Articles

▪ The Washington Post: Hundreds of retired military veterans have taken lucrative foreign jobs with Saudi Arabia and other countries since 2015 that U.S. officials approved — but fought to keep secret. The Post went to court to obtain 4,000 pages of government records and has continued to sue to obtain withheld information. The Post found that many military retirees take foreign jobs or gifts without notifying the U.S. government at all. The armed forces and the State Department have no mechanism to identify such cases. New scrutiny by Congress and the administration is widely expected as a result of the reporting.

▪ Reuters and The Associated Press: Biden and Mexican President Andres Manuel López Obrador discussed migration “management” and security issues by phone on Tuesday. López Obrador said on Twitter following the call that Biden confirmed that he will travel to Mexico for a North American leaders summit, a face-to-face meeting that Canadian Prime Minister Justin Trudeau is also expected to attend. A date has yet to be set for the meeting.

▪ The Hill: Lawmakers in both parties eye the lame-duck session to pass legislation that would allow cannabis businesses to access banking services. Time is running out, according to advocates.  

LEADING THE DAY 

➤ POLITICS

Frayed nerves and high stakes have put midterm candidates on the offensive and made campaign attacks nastier — and more personal. Monday’s slate of debates, from Ohio to Utah to Georgia, showed just how on edge candidates are feeling less than three weeks out from Election Day (Politico and The New York Times).

For the second straight debate, Rep. Tim Ryan (D-Ohio) went after Republican J.D. Vance for being too close to former President Trump. He said that Vance, once a prominent critic of the former president, was “calling Trump America’s Hitler. Then he kissed his ass.”

Vance, meanwhile, said Ryan’s “entire campaign is based on sucking up to the national Democratic establishment” and that the Democrat “says he’s reasonable, keeps saying he’s a moderate … but when he gets to Washington, he votes the opposite way,”(The Hill and Axios).

And it’s not just the debates that are bringing out more direct lines of attack.

In Georgia, Sen. Raphael Warnock (D) is signaling that he’s ready to ditch his typically restrained persona in favor of more direct attacks on his Republican opponent Herschel Walker, writes The Hill’s Max Greenwood. In recent days, Warnock, who has built his campaign around his work in the Senate and a record of bipartisanship, has shifted toward more open confrontation with Walker. He used a Sunday debate that Walker did not attend to hammer the former football star over his history of domestic violence and leveled another series of attacks on Monday, accusing Walker of lying about everything from his academic credentials to his claim that he has worked in law enforcement.

The more pugilistic approach is likely to come as a relief to some Democrats, who have privately complained about Warnock’s tendency to play it safe and argue that the incumbent senator needs to do more to highlight Walker’s liabilities in an ever-tightening race. 

▪ NBC News: “Clearly not ready”: Warnock votes early and dials up criticism of Walker as dishonest.

▪ The Hill: Georgia smashes record for early voting.

▪ The Hill: Warnock calls out Walker for skipping debate: “Half of being a senator is showing up.”

Florida Sen. Marco Rubio (R) had a fiery debate with Democratic challenger Rep. Val Demings (Fla.) on Tuesday (The Hill), hours after the nonpartisan Cook Political Report shifted its ratings for the race to “likely Republican” from “lean Republican” as the GOP’s midterm outlook improved in recent weeks (The New York Times and The Hill). 

In Pennsylvania, Republican Mehmet Oz has spent much of the campaign attacking his Democratic opponent, Lt. Gov. John Fetterman, about everything from his views on crime to Fetterman’s use of captioning devices as he recovers from a stroke he suffered in May.

It’s working.

While Fetterman showed a comfortable double-digit lead over Oz when the latter won his primary, a new AARP Pennsylvania poll found Fetterman receiving 48 percent support among likely voters polled in the state, compared to Oz at 46 percent. That polling falls within the margin of error, which is plus or minus 4.4 percentage points, effectively tying the two candidates (The Hill).

But some of the attacks have come from inside the parties’ own ranks.

Former President Trump on Monday angered Republicans when he criticized Colorado Senate nominee Joe O’Dea, writes The Hill’s Al Weaver, leading GOP officials to wonder if he cares about his party winning back a majority in the upper chamber. O’Dea, a pro-choice moderate Republican, against whom Democrats spent $4 million in the primary, was already in an uphill fight against Sen. Michael Bennet (D), but Trump’s opposition comes at the worst time possible. Ballots began to be distributed in Colorado on Monday.

“It certainly is not [helpful],” Sen. Kevin Cramer (R-N.D.), a Trump ally, told The Hill. “I would hate to see O’Dea lose to Sen. Bennet by a few votes just because Donald Trump urged Republicans not to vote and we came up short of the majority by one senator. If Mitch McConnell opposed every Republican nominee who criticized him publicly, we wouldn’t stand a chance.”

The former president has a long history of attacking those in his own party, starting back when he was a candidate in 2016 (The Washington Post). Since then, various GOP candidates and lawmakers have fallen in and out of Trump’s favor, especially those who have criticized him or supported the impeachment proceedings he faced in 2020 and 2021 (MSNBC and The New York Times).

Semafor: Trump’s plan to kill mail ballots in Pennsylvania.

Democrats, meanwhile, fear they hit their stride too early in the campaign cycle. Three weeks ahead of Nov. 8, the midterm contests appear favorable for Republicans, The Hill’s Alexander Bolton writes, leaving Democratic leaders to play the blame game.

Former President Obama stepped into the spotlight over the weekend by calling some Democrats “buzzkills” for being too quick to scold fellow Americans for not being woke enough, while Sen. Bernie Sanders (I-Vt.), who is eyeing a run for president in 2024, says the party didn’t go big enough in passing bills to help Americans struggle to cope with the cost of living. Other Democrats are pointing the finger at Biden’s low approval rating and the historic headwinds faced by the president’s party during midterms.

Politico: Future Democratic stars at risk of getting wiped out in the midterms.

One last wildcard in these midterms may turn out to be older voters, who often prove indecisive, writes The Hill’s Zach Schonfeld. While an AARP poll released earlier this month showed their motivation to vote remains high, only 49 percent of women aged 50 or older and 48 percent of men in the same age group have determined who they will vote for in November.

IN FOCUS/SHARP TAKES

➤ INTERNATIONAL

Russia’s escalation of its attacks on Ukraine is pushing Moscow’s war into a new phase against Kyiv, writes The Hill’s Laura Kelly. The use of Iranian “kamikaze drones” to target critical infrastructure ahead of the winter months raises the stakes for the U.S. and its allies to quickly send air defense systems to the country and puts pressure on the White House and the European Union to punish Tehran amid tentative talks to revive a fraying nuclear agreement.

Iran has agreed to ship more missiles and drones to Russia, defying the West. The deal, which was reportedly brokered on Oct. 6, was first reported by Reuters on Tuesday.

One of the drones Iran agreed to supply is a delta-winged weapon used as a “kamikaze” air-to-surface attack aircraft. It carries a small warhead that explodes on impact, and attacks from these drones left at least four dead in Kyiv on Monday (NPR).

▪ The New York Times: Iran sends drone trainers to Crimea to aid the Russian military.

▪ Politico EU: Planning for the chaotic post-Putin world.

▪ The Washington Post: Germany removes cyber chief accused of ties to Russia.

Treasury Secretary Janet Yellen held a virtual meeting on Tuesday with Prime Minister of Ukraine Denys Shmyhal and reaffirmed the U.S. commitment to support Ukraine and disburse $4.5 billion in recently approved budget support, now bringing the U.S. total to $13 billion through grants. Yellen acknowledged Ukraine’s “significant financing needs next year,” according to the department (Reuters).

After a difficult first six weeks in office, British Prime Minister Liz Truss faces harsh questions about her political future after her sweeping economic plan — complete with tax cuts for the wealthy amid painful high inflation for most Brits — met with widespread criticism and sent the U.K.’s fiscal picture into a tailspin (NPR). 

Truss, who has been assailed from all quarters, will field questions today from members of the House of Commons.

▪ The Wall Street Journal: U.K. inflation reaches 10.1 percent as government reversals cloud outlook.

▪ The New York Times: In Europe, bread prices are up 18 percent from a year ago as flour prices soar 30 percent.

▪ The Wall Street Journal and Le Monde: Striking French workers seeking higher wages and demonstrators who took to the streets across France on Tuesday to protest inflation and escalating energy prices are a sign of turmoil facing French President Emmanuel Macron and other European leaders.

▪ The New York Times: French cement company to pay $780 million over payoffs to ISIS.

➤ ENVIRONMENT 

Research shows that people all around the country are being impacted by perfluoroalkyl and polyfluoroalkyl substances, more commonly known as PFAS, and may not even know it, writes The Hill’s Rachel Frazin.

PFAS are a large, complex group of manufactured chemicals that are ingredients in various everyday products such as nonstick cookware and stain-resistant fabrics. These chemicals do not degrade easily in the environment and a recent study found more than 57,000 sites that the chemicals have presumably contaminated.

Their widespread use and persistence in the environment mean traces of PFAS can be found in the blood of people and animals all over the world as well as in food products and the environment. There are significant numbers of communities suffering from the impact of PFAS, although possibly unaware of the cause, said study author Alissa Cordner. 

“There absolutely are more Parkersburgs out there,” she said, referring to a community in West Virginia known for residential exposure to PFAS. “There are more places that have decades of accumulated contamination that we just don’t know about because the testing hasn’t been conducted.”

The Hill: Elevated energy costs will not hit U.S. regions evenly and could impact lower and middle-income families this winter as they struggle with rising expenses. 

OPINION

■ Republicans’ secret economic agenda? A global financial crisis, by Catherine Rampell, columnist, The Washington Post. https://wapo.st/3TaTLZF 

■ Liz Truss is finished, by Tanya Gold, guest essayist, The New York Times. https://nyti.ms/3MDJwdY

WHERE AND WHEN

The House meets at 11 a.m. on Friday for a pro forma session. Members are scheduled to return to the Capitol on Nov. 14. ​​

The Senate convenes Thursday at 9 a.m. for a pro forma session. Senators make their way back to Washington on Nov. 14. 

The president will receive the President’s Daily Briefing at 10:45 a.m. Biden will have lunch with Vice President Harris at 12:15 p.m. He will discuss energy security at 1:15 p.m. in the Roosevelt Room. Biden will speak in the Eisenhower Executive Office Building about the bipartisan infrastructure law at 3 p.m. with Energy Secretary Jennifer Granholm.

The vice president will have lunch with the president. She has no other events on her public schedule.

Secretary of State Antony Blinken is in Philadelphia today and will speak at the unveiling of a mural dedicated to the late former Rep. Robert N.C. Nix Sr. (D-Pa.) at 1:15 p.m. Blinken at 2 p.m. will speak at the opening of a new Passport Agency facility and a U.S. Citizenship and Immigration Services naturalization ceremony. The secretary at 2:25 p.m. will administer the oath of allegiance to candidates for U.S. citizenship gathered in Philadelphia.

Health and Human Services Secretary Xavier Becerra and Food and Drug Administration Commissioner Robert Califf at 9:30 a.m. will visit a Walgreens location in Northwest Washington, D.C., to talk with seniors about the availability of over-the-counter hearing aids for mild hearing loss. Sen. Elizabeth Warren (D-Mass.), an author of the law that made the change, will participate.  

First lady Jill Biden will speak at the Communities In Schools leadership town hall conference at 11:15 a.m. in Washington. She will visit with staff and volunteers at the Democratic National Committee headquarters in Washington, D.C., at 5 p.m. 

The White House daily press briefing is scheduled at 12:15 p.m.

ELSEWHERE

➤ PANDEMIC & HEALTH 

Experts are nervously eyeing a swarm of COVID-19 variants that could drive the next wave of infections, The Washington Post reports. One or multiple versions of the existing omicron variant could fuel a winter surge. “It is this constant evolutionary arms race we’re having with this virus,” said Jonathan Abraham, an assistant professor of microbiology at Harvard Medical School.

Information about COVID-19 vaccine and booster access can be found HERE.

Moderna will supply up to 100 million doses of COVID-19 booster shots to vaccine alliance Gavi for distribution in lower-income countries in 2023. The vaccines will be distributed through Covax — a World Health Organization initiative aimed at equitable access to COVID-19 vaccines (Bloomberg News).

The administration has a new strategy to combat a future pandemic. The National Biodefense Strategy calls for the U.S. to produce a test for the new pathogen within 12 hours of discovery and a sufficient vaccine supply to protect the nation within 130 days (Bloomberg News).

In the wake of the Supreme Court’s overturning of Roe v. Wade, which ended national protections for abortion access, a growing army of activists is funneling abortion pills from Mexico into states that have enacted restrictions. Community-based distributors are reaching pregnant women through word of mouth or social media to supply the pills for free, which comes with legal and medical risks for both recipients and suppliers (The Washington Post).

Bloomberg News: The rise and fall of the COVID-19 billionaires.

Total U.S. coronavirus deaths reported as of this morning, according to Johns Hopkins University (trackers all vary slightly): 1,065,868. Current average U.S. COVID-19 daily deaths are 321, according to the Centers for Disease Control and Prevention.

THE CLOSER

And finally … ☄️ One of the brightest and most powerful explosions in space ever recorded by telescopes came to Earth’s attention on Oct. 9 as a gamma ray burst. Scientists believe the creation of the long, bright pulse occurred when a massive star in the Sagitta constellation — about 2.4 billion light-years away — collapsed into a supernova explosion and became a black hole. The star was likely many times the mass of our sun (CNN).

It’s the kind of experience scientists gush about because it’s rare and technology has made it possible to discern the events and record them. 

“Because this burst is so bright and also nearby, we think this is a once-in-a-century opportunity to address some of the most fundamental questions regarding these explosions, from the formation of black holes to tests of dark matter models,” Brendan O’Connor, a doctoral student at the University of Maryland and George Washington University in Washington, D.C., said in a statement.

According to NASA, gamma ray bursts are the most energetic and luminous electromagnetic events since the Big Bang and can release more energy in 10 seconds than Earth’s sun will emit in its 10 billion-year expected lifetime. Gamma rays and X-rays set off detectors installed on NASA’s Fermi Gamma-ray Space Telescope, the Neil Gehrels Swift Observatory and the Wind spacecraft, as well as ground-based telescopes, including one in Chile.

Stay Engaged

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How to prepare for a potential recession in 2023

Many market watchers are predicting a recession in 2023 as the Fed continues to raise interest rates in its battle against 40-year-high inflation.

Due to a persistently hot job market, a recession is not a certain fate, but the economy has already contracted for two quarters in a row, and a period of cooling off after the blistering recovery from pandemic shutdowns is only logical, some analysts say.

Recessions inspire fretting from CEOs and workers alike, but they’re a normal part of the business cycle.  

Recessions are also retroactively designated, so when the next one begins, consumers won’t know it until after the fact. That means it may be a good idea to start preparing for a recession now.

Here are a few ways to get in good financial shape for a recession.

Take advantage of a red-hot labor market while it lasts

At least one economic projection has put the likelihood of a recession within the next 12 months at 100 percent, but there’s hardly a consensus on when or even if a recession is going to occur.

A big driver of that uncertainty is the job market, which shows high demand for workers, implying continued growth in the economy.

This is a significant factor considered by the National Bureau of Economic Research (NBER), whose Business Cycle Dating Committee is the official designator of recessions.

“Virtually everything points in the opposite direction from the slight fall in GDP measured on the product side,” Jeffrey Frankel, a former member of the committee, said in an interview, referencing gross domestic product.

“You just can’t call it a recession when you have the ratio of vacancies to unemployed workers the highest it’s ever been. I mean, that’s just so far from a recession,” he said.

Many workers have been taking advantage of the high demand for labor, quitting their jobs over the past year and looking for better work in what’s come to be called the Great Resignation.  

Since there are still so many more open jobs than people who need them, as illustrated by the vacancy-to-unemployment ratio, conditions favorable to workers look set to continue.

A March survey from Pew Research found increased benefits to switching jobs, such as better pay, upward mobility and improved work-life balance.  

Workers have also been unionizing, striking and threatening to strike in the face of rising inflation. A possible railroad strike in September promised to shut down huge segments of the U.S. economy and required action from the White House to avoid. Lumberjacks in Oregon and nurses in Minnesota also walked off the job last month.

On Monday, Treasury Secretary Janet Yellen met with labor federation AFL-CIO President Liz Shuler and Policy Director Damon Silvers about the strength of the U.S. labor market, which added 3.8 million jobs in the first nine months of 2022 for the second strongest year-to-date gain in over 75 years, according to the Treasury.

Keep an eye on the housing market

In the U.S., the housing market is another major driver of inflation, with rents and mortgage rates soaring amid a national housing shortage that numbers in the millions of homes, according to various studies and commercial estimates.

Shelter costs count for more than 30 percent of the consumer price index and about 40 percent of core inflation, which removes the volatile categories of energy and food. Core inflation rose 0.6 percent in both September and August and is up 6.6 percent on the year – the same as last month.

For renters and people paying mortgages, there isn’t a whole lot to do besides trying to stay out of an unfriendly market and make do.

Real estate investors are likely to feel the same way, as “prospective homebuyers remain reluctant to jump into the housing market,” according to a statement last week from Mortgage Bankers Association President Bob Broeksmit.

Adjust personal finances

With the Fed raising interest rates, paying for goods and services with financing is going to get more expensive. So experts say that putting off major purchases and paying down debts now is a good way to save money as interest rates creep up toward 4.6 percent in 2023, according to the latest median estimate from the Fed.

Getting approved for personal or business loans may also become more difficult, as banks put more scrutiny on applicants who may have a tougher time paying money back at a higher interest rate.  

While commercial lenders have been increasing their own rates to keep up with the Fed’s, they have not passed these rates onto their customers.

Savings accounts average a 0.21 percent return, according to the FDIC, despite a federal funds rate that’s now about 3 percent.  

Due to the increased risk of layoffs during a recession, many personal finance experts also recommend that households set up an emergency fund in the event that earners get fired by their employers.

Consider investing in bonds

Unless you’re a professional investor who pays attention to daily market movements, it’s hard to take advantage of wild swings in the stock market created by the environment of rising interest rates.

In recent weeks, the Dow Jones Industrial Average has frequently seen trading days with gains and losses that number in the hundreds of points, and while such volatility can be attractive to day traders, it doesn’t present much of an opportunity for full-time workers.

Most major stock indices are way down on the year — most in the ballpark of 20 percent — so investing directly in companies or index funds can seem like a risky proposition.

But as interest rates have climbed, leading to turmoil in equities and increasing the power of the U.S. dollar, the typically less dynamic bond market has seen a steady rise in returns. The two-year U.S. Treasury note now has a 4.4 percent yield and the 10-year has a 3.9 percent yield.

Jason Blackwell, head of investments at financial firm The Colony Group, said in an interview that U.S. bonds are “potentially a better tool at [investors’] disposal than they have been for the last ten years.”

“When 10-year Treasuries with very little risk of U.S. default are paying you 4 percent, that’s a pretty good return – a pretty good yield that we’ve not seen in almost a decade,” he said.

Source: TEST FEED1